Friday Free For All
It’s time for our regular open topic Friday Free-for-all post here on VancouverCondo.info!
- But why are they really selling?
- Vancouver sales slow to 2001 levels
- Keep building stuff and they’ll keep coming
- Canadian prices (except Edmonton) rising
- 40 years terms add fuel to the fire
- TD Chief Executive gets all gloomy
- AAA rating not what it used to be
- Bernanke: Housing crash not Feds problem
- An eye out for mortgage fraud
So what are you seeing out there? Post your news, links, and anecdotes here and have a great weekend!
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Re-diculous Says:
April 4th, 2008 at 5:04 am
Okay, I’m finally convinced things are changing…check out this article in today’s Province…an article that they would not dare to place a year ago:
“Housing market to sink after Games’
http://www.canada.com/theprovi.....fdcdf10c66
…I find myself humming my favorite David Bowie tune for all those RE people out there:
“Turn and face the strange CHANGES”
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freako Says:
April 4th, 2008 at 5:59 am
From the Sun article:
“Also, Adamache said, on average, homes are selling for 98 per cent of their list price, which is also consistent with a seller’s market.”
Reaching the bottom of the spin barrel? What a useless stat.
“People are cognizant of risks to real estate in a way that, two years ago, they weren’t entertaining,” Somerville added.”
How about you Tsur? Didn’t quite speak up then did you?
“[Sales are] still very high by historical standards,” Adamache added. ”
Yes, but dropping like a rock. You have demonstrable extrapolation skills. Use them.
Then a whole bunch of talks about a balanced market, which is I presume is a milestone the way to an inversely unbalanced market (supply exceeding demand)
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blueskies Says:
April 4th, 2008 at 6:28 am
freako:
good take on the obfuscation factor
the spin is starting to get me dizzy
tiny url for province article
http://tinyurl.com/45yvl2
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VHB Says:
April 4th, 2008 at 6:39 am
Again, what gets me is that the CMHC guys (who are paid by the taxpayer) see it as their job to work as hard as possible to outspin even the realtor organizations. Why does CMHC see it as their job to artificially pump up housing prices? CMHC is a seriously warped organization.
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Burden of Proof Says:
April 4th, 2008 at 7:19 am
“Why does CMHC see it as their job to artificially pump up housing prices?”
For the last 20 years or so, a free market ideology has been dominant in government and in crown corporations. The latter are expected to maximize profits. This even effects the Canadian Mint. The maximization of profits ususally comes with assuming greater risks.
Beacause of the latter, CMHC sees it as their job to pump housing prices and because declining housing prices will lead to CMHC to suffer insurance losses, their employees will loose their jobs, the CEO will be fired, if the losses are scandalous he will be called before a parliamentary committee, if its bad enough there will be an inquiry into the business of CMHC. It will emerge that CMHC big wigs have been aggressively wined and dined and sent on vacations by the big banks and therefore were in a conflict of interest when they took increasing risk.
Everyone at CMHC has an interest in keeping the boom going.
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Burden of Proof Says:
April 4th, 2008 at 7:24 am
The current credit bubble bust is also the bust of free market ideology – that markets should be regulated as little as possible, that the only rules should be those of economics. This was always a crock and now it is obvious to anyone as the financial system is in the worst crisis in 7 decades.
In the wake of the developing Canadian housing bust, I expect that CMHC will emerge as a neutered corporation fenced in by rigid rules.
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can Says:
April 4th, 2008 at 8:07 am
Calgary prices are also down YOY and the trend is negative!
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ReductiMat Says:
April 4th, 2008 at 8:09 am
In the wake of the developing Canadian housing bust, I expect that CMHC will emerge as a neutered corporation fenced in by rigid rules.
One would think, but don’t forget we live in the land of Angelo Mozillo, Bear Stearns and Paulson.
I suppose we’ll see how much of a Republican wannabe Harper is soon enough.
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pricedoutfornow Says:
April 4th, 2008 at 8:16 am
Good article, it doesn’t surprise me they printed it. The general sentiment on the street seems to be “housing will go down after the olympics” as I’m sure many of you have noticed. And as they say, buyer psychology defines the market. Guess I’ll be buying in three years with a nice downpayment (as long as inflation doesn’t eat it all up-another consequence of having artificially low interest rates for so many years)
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Patiently Waiting Says:
April 4th, 2008 at 8:57 am
I hear in casual conversation, over and over again, that sentiment has changed. People notice all the “for sale” signs up early this year and the lack of “sold” stickers.
I’m going over to Victoria for a few days, so I’ll have my ears perked up. We’ll see if I have anything to report.
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bdk Says:
April 4th, 2008 at 9:01 am
Pricedoutfornow, as you know I like to rant but will keep it short since it’s off topic.
Clean Technology/socially responsible investing and alternate energy appear to be poised to be the next bubble, if you get out in time it could work great and you could buy in at 40% off todays RE prices.
bubble 1 “the internet isn’t going away”
bubble 2 “everyone needs a place to live, the olympics the olympics!”
and next it’ll be “we only have one earth, we have to save it”
Various reasons for this idea are:
The boomers will eat it up and they have the money and a lot of them have a history of being socially active compared to their parents’ generation
People like to exit sectors where they’ve been burned and clean energy/ clean tech hasn’t burned anyone yet.
Governments will most likely help out and in some cases mandate change. For example the companies that clean the toxic water in the tar sands should have business for some time.
Blah Blah Blah
I have no way of knowing if anyone takes me seriously and I don’t know much anyways but hopefully you’ll consider the idea. I can keep going here but don’t want to put anyone to sleep.
It seems like that sector may be a good way to beat inflation while the market tanks.
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Edwin Bubble Says:
April 4th, 2008 at 9:02 am
Just another isolated data point, but a dear of friend of mine is in banking and has been doing loans&mortgages for years now. Nice guy, but an excellent sentiment indicator since he’s a solid follower and can be relied upon to defend whatever line he hears from the people around him, which in his case is wealthy investors and builders.
Up until just a couple of months ago he was arguing that I was mad not to buy, and that I should let him set up a mortgage for me on something, anything.
As of yesterday he now believes we’re due for a correction quite soon and that real estate is a bad thing to invest in at the moment – he talked about a real sea change in the attitudes of the people he meets with.
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patriotz Says:
April 4th, 2008 at 9:17 am
The current credit bubble bust is also the bust of free market ideology – that markets should be regulated as little as possible
Well of course what “free market” ideology really believes in is that market intervention is good as long as it benefits the big players at the expense of the taxpayers. Right, Al? Right, Ben? Right, CMHC?
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Clarke Says:
April 4th, 2008 at 9:30 am
“Free market” in contemporary practice usually means the profits are private. Losses, especially catastrophic ones, as well as some investments have a curious habit of ending up being a matter of public funds.
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Mold City Says:
April 4th, 2008 at 10:15 am
Great link re-diculous – the post games crash seems so obvious, and indeed it sounds like you hear more and more acceptance of that fact from investors, owners and renters, but I don’t recall seeing much about it in the local media.
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Mold City Says:
April 4th, 2008 at 10:27 am
VHB: Amen! CMHC has become a dangerous organization over the last few years. Why they weren’t content to let the boom happen on its own based on low interest rates and felt the need to introduce US style zero down / 40 year terms is a mystery to me. If their goal is to keep property markets up, what tools do they have left to deal with a slumping market?
In the wake of the developing Canadian housing bust, I expect that CMHC will emerge as a neutered corporation fenced in by rigid rules.
Dare to dream! CMHC holds a fair amount of responsibility for this bubble, but that doesn’t mean that there will be repercussions.
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Dosh Says:
April 4th, 2008 at 10:55 am
The CMHC has done exactly what it’s supposed to do and made housing more affordable for everyone. If you think prices are expensive now imagine if there was no option for lower down payments and longer terms – the monthly payment would be much higher and affordability for first time buyers would be much worse.
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Tony Danza Says:
April 4th, 2008 at 11:04 am
Hello Dosh,
Can you please provide data/analysis that shows how CMHC has improved affordability for Canadians since introducing the new improved lax lending standards?
Please include a sensitivity analysis to show how affordability is affected at different interest rates in the range of 0-10%. Thanks!
BTW don’t feel too bad if you’re too “realtarded” to perform such an analysis, Tsur Somerville can’t either.
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miracle Says:
April 4th, 2008 at 11:05 am
“The CMHC has done exactly what it’s supposed to do and made housing more affordable for everyone. If you think prices are expensive now imagine if there was no option for lower down payments and longer terms – the monthly payment would be much higher and affordability for first time buyers would be much worse.”
Harrumph. Well, that’s one way of looking at it. Another way they could have fulfilled their mandate by helping to moderate actual prices, rather than focusing on affordability. They might have contributed to this by keeping the lending standards where they were, thus keeping risky loans out of the market, thus lsowing activity and keeping the bubble from getting too large.
No?
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Tony Danza Says:
April 4th, 2008 at 11:18 am
They might have contributed to this by keeping the lending standards where they were, thus keeping risky loans out of the market, thus lsowing activity and keeping the bubble from getting too large.
Actually you could look at the CMHC as fulfilling their mandate by driving prices ever higher thereby sucking more and more speculators (and irresponsible FTB’s) into the market. This results in increasing inventory to satisfy the perceived demand and ultimately (after prices return to reality) resulting in plenty of affordable housing for responsible Canadians.
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freako Says:
April 4th, 2008 at 11:39 am
Beacause of the latter, CMHC sees it as their job to pump housing prices and because declining housing prices will lead to CMHC to suffer insurance losses, their employees will loose their jobs, the CEO will be fired, i
Well that obviously snowballs. Talking up prices will keep the portfolio safe, but then they are required to take on riskier and riskier loans. It could well be that they are just pushing doom forward, hoping to retire before it all falls apart. That is one of the problem in the corporate world. Many CEO’s are within a years of retirement and are only interested in looking good until their options are fully vested.
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hightower Says:
April 4th, 2008 at 11:56 am
I call bull on prices crashing after the games, thats when new people here will be buying. That socalled expert isnt even from here hes from ottawa!
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hightower Says:
April 4th, 2008 at 12:04 pm
That whole article in the province is bull, I can’t believe they call it a housing bubble, its probably just another guy from outside of vancouver that wants to live here and is wishing prices were lower. imagine how sorryy you would be if you take his advice and wait to buy but prices go up another 20% in that same time. if you have money to buy but you dont then your just passing up on an investment chance.
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M- Says:
April 4th, 2008 at 12:04 pm
Tony Danza: I like your high-level look at interpreting CMHC’s actions!
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jesse Says:
April 4th, 2008 at 12:09 pm
Take a look at the latest Seattle stats. Interesting to look at how fast the YOY change in price has dropped to zero.
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Lager not Logger Says:
April 4th, 2008 at 12:21 pm
hightower and dosh, is there any circumstance or price level that you would think vancouver real estate is overpriced at ? Or is this a magical place that warrants any price level no matter how far it is from rents and incomes?
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Lager not Logger Says:
April 4th, 2008 at 12:25 pm
If you’re investing in real estate shouldn’t you consider what its rental income would be? Our prices are approaching New Yorks to buy, but while CMHC says the average 2 bedroom apartment rent in Vancouver last year was $1086, Forbes shows the median 2 bedroom apartment rent in New York to be $4000.
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MATHAMATICAL Says:
April 4th, 2008 at 12:28 pm
Hightower,
Why would an expert from Ottawa opinion not count? Ah yes, only the opinion of poeple living in Vancouver counts. Think inside the bubble and not outside the bubble.
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Rob A. Says:
April 4th, 2008 at 12:29 pm
I found this blog and I don’t know what all of you are so pessimistic about. I own a condo downtown and I don’t think it is going to go down because everyone wants to live downtown. It’s where the action is! Everyone wants to live there!
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Rob A. Says:
April 4th, 2008 at 12:35 pm
If you want to go to restaurants and cafes, then downtown is the place to be! You can only be a bear if you don’t realize that.
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Anonymous Says:
April 4th, 2008 at 12:37 pm
hightower, rob a and dosh, is there any circumstance or price level that you would think vancouver real estate is overpriced at ? Or is this a magical place that warrants any price level no matter how far it is from rents and incomes?
If you’re investing in real estate shouldn’t you consider what its rental income would be? Our prices are approaching New Yorks to buy, but while CMHC says the average 2 bedroom apartment rent in Vancouver last year was $1086, Forbes shows the median 2 bedroom apartment rent in New York to be $4000.
“I own a condo downtown and I don’t think it is going to go down”
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Rob A. Says:
April 4th, 2008 at 12:42 pm
You can’t get a 2 bedroom apartment for $1080 downtown. Downtown is the place to be for people in the know!
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Tony Danza Says:
April 4th, 2008 at 12:50 pm
Rob A., I predict a flood in your future. A flood of mortgage debt over the equity in your rabbit hutch downtown. Good luck!
BTW are there any recent (last 0-5 years) home purchasers that aren’t optimistic about the near term future of Vancouver RE prices?
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Rob A. Says:
April 4th, 2008 at 12:55 pm
Tony Danza, don’t be such a bitter-renter, haha. Not everyone can afford the downtown lifestyle. Anyways, have a good day I have to meet my friends at the caffe.
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DowntownSucks Says:
April 4th, 2008 at 12:56 pm
Rob, i left downtown a few months ago after years renting there. My rent went down by over $1500 and I don’t miss a thing. Spending half day looking for parking and the other half working to pay for it is no longer my lifestyle. I simply got tired of ever increasing number of people and cars and lack of infrastructure.
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Rob A. Says:
April 4th, 2008 at 12:58 pm
DowntownSucks, I’m glad that you decided to do what makes you happy. Like you said more and more people want to live the downtown lifestyle because it makes them happy. It takes all types, even bitter ones I guess, haha.
cio.
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Anonymous Says:
April 4th, 2008 at 1:16 pm
Rob A. = Krrish2
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Bob B Says:
April 4th, 2008 at 1:17 pm
Rob A.
You obviously grew up in Delta and are about 21. This is your first experience outside of your parents house and your unsophisticated parents have lent you a small amount of cash to buy a small crappy condo simply because they heard that this is what people did to make money.
Downtown is the place to be, a lot of us bought a long time ago or didn’t and are choosing to invest the thousands of dollars that they are saving into other investments, yes I know this is overwhelming but there are other ways to make money.
Your inability to comprehend or answer any of the question above prove that you’re an imbecile.
You aren’t going to meet your friends at the Cafe, you are going to work at Starbucks.
Enjoy your condo, when you get off your shift look up negative equity.
Idiot
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Rob A. Says:
April 4th, 2008 at 1:19 pm
LMAO.
Ok, now I really have to go
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Worlds Greatest Lover Says:
April 4th, 2008 at 1:20 pm
Downtown Vancouver = Crack hos, homos, & hobos.
(that’s why I love it)
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SweetHomeKilla Says:
April 4th, 2008 at 1:21 pm
don’t be such a bitter-renter, haha. Not everyone can afford the downtown lifestyle.
I have a sister and BIL who moved to San Diego 1.5 years ago and against advice bought themselves a brand new BOSA condo. He really wishes he were a bitter renter now (she’s oblivious). Comparable units are listed at 20-45% less than he paid for his. I feel sorry for him, but I feel even more sorry for myself as it seems too cruel to phone him up and scream TOLD YOU SO into the receiver.
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ted Says:
April 4th, 2008 at 1:24 pm
Thanks for the link on seattle jesse, its funny how all the western markets that used to be proof the whole region was immune to a correction have all started to fall. The build up in inventory we’re seeing in Vancouver right now is the first step here.
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Anonymous Says:
April 4th, 2008 at 1:30 pm
looks like Rob A. got pwnd
lol
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Olympics Says:
April 4th, 2008 at 1:42 pm
can anybody explain why people believe that RE should keep getting more expensive towards olympics and may crash only after the games? How are these two things connected?
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Shuma-Gorath Says:
April 4th, 2008 at 1:43 pm
^ patting yourself on the back just makes you look like even more of an insecure jackass Bob A…. fyi.
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Booya Says:
April 4th, 2008 at 1:53 pm
Olympics – you’re right, they aren’t connected. I want to pull out my hair and scream every time someone mentions the “obvious fact” that having the olympics will somehow permanently increase housing prices. There is no thought whatsoever behind those comments – it’s just “common sense” but ask someone why there should be any connection and you get a blank stare.
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DaMann Says:
April 4th, 2008 at 1:57 pm
Olympics
Prices will fall before the Olympics. The specuvestors all think they will be brilliant and unload right after the games. Smart money will be long gone before the first Gold medal is handed out.
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DaMann Says:
April 4th, 2008 at 1:59 pm
To quote a friend of mine ( kool aid drinker and amateur specuvestor) “Sell before the Olympics?, what are you an idiot?”
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Olympics Says:
April 4th, 2008 at 2:01 pm
DaMann, you are implying that there is a connection between RE and olympics- whether prices fall before or after is a separate question. I am trying to figure out why people think olympics has any influence on RE price levels? People who come to watch the games aren’t buying condos, are they? So what’s the connection???
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moldcity Says:
April 4th, 2008 at 2:08 pm
The connection is purely emotional, but thats enough of a driver for speculation. I think it makes some people feel special, the start using terms like ‘best place on earth’. Don’t get me wrong this is a fine little city, but lets be realistic, its not the ‘best place on earth’.
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DaMann Says:
April 4th, 2008 at 2:11 pm
Hype is the connection, that’s my point. All the specuvestors haven’t a clue what the games will do so they all think that for whatever reason prices will skyrocket until after the games. There are actually some morons who keep bantering on about the fact that they will be able to rent out their DT condo for $10k for the 2 weeks for the games. So overpaying by $300,000 is worth it to be able to rent it out for $10k for 2 weeks. So in a nutshell the morons think that stupid high rents for 2 weeks is a justification for 50% overvalue.
As well there are other not so bright thinkers that actually believe the world doesn’t know about Vancouver and after watching the games they will all flock here to live. Just like they did for Turin. You know Turin, the place everyone wants to live.
Actually I think a strong agrument can be made for why the Olympics will hurt RE prices here long term. Massive debt, bad press ( it will basically rain for 2 weeks and the world will be watching), Overbuilding.
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Drachen Says:
April 4th, 2008 at 2:13 pm
Olympics
Some people believe that they can kick out their tenants, rent their crappy 1 bedroom shoebox out for $25,000 for two weeks then sell at a profit.
The connection is people are stupid. The same crap was said about Expo 86, look where that went.
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moldcity Says:
April 4th, 2008 at 2:13 pm
In a way Vancouver is in a bit of an awkward adolescent phase. It’s too big to have the charm of a small city that it once had, but not big enough yet to have the impressive range of economic and cultural dynamics that happen in world class cities.
So for now we make do with economics based on pot and construction and most of the people that would add to the art and culture of the city move to where there’s more opportunity or the cost of living is lower.
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DaMann Says:
April 4th, 2008 at 2:15 pm
So in a nutshell there is no connection. The people I talk to are oblivious to the fact the this is/was a WORLD WIDE RE boom. They have no clue. If Vancouver was the only city in N. America to boom then maybe there was a factor of the games. The whole bloody world is/was booming and now correcting.
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Anonymous Says:
April 4th, 2008 at 2:18 pm
Shh! You’ll scare the specuvestors!
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Olympics Says:
April 4th, 2008 at 2:30 pm
ok, so the world comes here to crap for couple weeks and folks think it has effect on RE… Thanks for helping me understand this. Oh wait, i still don’t get it!
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Booya Says:
April 4th, 2008 at 2:48 pm
The fact that it even occurred to you to ask the questions means you “get it” far more than the average condo flipper!
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franko Says:
April 4th, 2008 at 2:52 pm
.
.
The only effect the Olympics have had on our economy was inflating construction costs of all those new condos. That’s all history, as the olympic portion of all that costruction is winding down, and those costly condos are not selling.
Our market will have crashed and bottomed by 2010, and looking for excuses to resume the uptrend.
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Rob A. Says:
April 4th, 2008 at 3:18 pm
I’m really looking forward to the Olympics. It’s going to be a fantastic two week party especially if you live downtown, where all the action is!
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Anonymous Says:
April 4th, 2008 at 3:27 pm
Right on Rob A. Good attitude. I’ll leave you to it though! too much traffic and crap for me, and I’m not into winter sports at all. I’ll be subletting out my rental for twice what I pay and going south to a warmer climate for the month, gotta love a good lease agreement!
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blueskies Says:
April 4th, 2008 at 3:58 pm
Shh! You’ll scare the specuvestors!
exactly!
the only way these types learn anything is through actual experience.
they have to live through the bare knuckle reality check.
neg cash flow/newbie landlord/underwater debt load/sleepless nights
collection agency with your number
on speed dial
wake up satv the bell tolls for you!
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paul Says:
April 4th, 2008 at 4:03 pm
Another very bearish Sell/list ratio coming to http://www.nvcondos.ca tonight. Look for the numbers between 8pm and 9pm.
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sheeplessinvancouver Says:
April 4th, 2008 at 5:12 pm
“average 2 bedroom apartment rent in Vancouver last year was $1086, Forbes shows the median 2 bedroom apartment rent in New York to be $4000.”
I’m not a statistician, but aren’t “average” and “median” different measurements? And are the rental figures for the same year? A one bedroom in Vancouver will cost at least $1200 this year.
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crabman Says:
April 4th, 2008 at 5:21 pm
I found this blog and I don’t know what all of you are so pessimistic about. I own a condo downtown and I don’t think it is going to go down because everyone wants to live downtown. It’s where the action is! Everyone wants to live there!
Can you tell us which of the following apply to you?
A. Young.
B. Not very financially sophisticated.
C. A troll.
D. Just messing with us.
E. Krrrish.
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blueskies Says:
April 4th, 2008 at 5:27 pm
rob:
do you by any chance own a condo at 1188 Howe?
a sub penthouse with views of Granville?
the one with 25K of upgrades?
if so…. did you ever get to sell it?
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Strataman Says:
April 4th, 2008 at 5:51 pm
Crabman
You forgot F “Just plain ignorant!”
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Drachen Says:
April 4th, 2008 at 5:52 pm
Lager not Logger
“average 2 bedroom apartment rent in Vancouver last year was $1086, Forbes shows the median 2 bedroom apartment rent in New York to be $4000.”
Are you sure that’s not Manhattan? The City of New York says the median rental cost per household is $826 in 2005 so I can’t imagine how that statistic is possibly accurate.
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jadeeast Says:
April 4th, 2008 at 6:20 pm
If your looking for realeaste or rental info for NYC
http://www.streeteasy.com/ is pretty amazing IMHO.
Rental stats from today are.
found 8,113 listings
Median price: $3,325
Median size: 800 ft²
Median price per ft²: $57
Interesting to me seeing what big apple prices are in relative to here.
$1800 dollar studios in the Gramercy park area
$2700 bucks for a one bedroom.
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jadeeast Says:
April 4th, 2008 at 6:21 pm
Stats above were for Manhattan.
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Vansanity Says:
April 4th, 2008 at 6:33 pm
Busy boards, I love it, bulls getting on the defensive, I love it even more.
Re: Olympics – from what I have heard, the “reason” people feel there is a tie, is people believe the world will come here, sip from the same cup as Krrsh and the gang, and want to move here. At that time they’ll buy up everything they can, for over inflated insane prices because they will be in awe of Vancouver. Nevermind all the steals of deals elsewhere, this is the be all end all, the olympics will make it so.
FYI – 2010 same year as World Cup, South Africa. The World Cup is a far larger, and greater sporting spectacle than the Winter Olympics, who also get outshined by their seasonal twin, the Summer Olympics. Look it up, ratings don’t lie.
Also, as Drachen said they think there is a huge 2 week rental windfall that will make holding onto that property worth while.
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Vansanity Says:
April 4th, 2008 at 6:34 pm
Oh, I’m feeling it though, MSM is starting to print bearish reports on it, just the beginning. Still think its going to take some time for some serious negative momentum to take a toll on prices to get them back under the long term trend line, signaling to me that its buy time.
Be fearful when others are greedy and greedy when others are fearful,right? To the specuvestors its more like: From fear comes your greed, twit. Live and learn, buy and burn.
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blueskies Says:
April 4th, 2008 at 6:44 pm
at some point the MSM will be blamed for publishing bearish reports and “driving the market down”
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Drachen Says:
April 4th, 2008 at 6:53 pm
Jadeeast
Unfortunately those stats only tell us about what is on that website, not what rents are being paid on units that are occupied. It seems, given the disparity between the occupied median $ and the asking median $ that either;
There are a lot more high end units sitting vacant or
Streeteasy sees more clients in the high range than the low range (perhaps low range go to Craigslist or the newspaper).
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krrish2 Says:
April 4th, 2008 at 7:23 pm
Would you guys like to DIRECT this SPACE CRAFT of Vancouver r.e.to your friends and family then here it goes like this year over year over month over month over
2008
Mar08 Apr08 %Change
Detached 761k 764k 0.43
Attached 472k 473k 0.29
Appt 387k 389k 0.67
2007
Mar07 Apr07 %Change
Detached 682k 695k 1.9
Attached 428k 432k 1.1
Appt 349k 355k 1.7
2006
Mar06 Apr06 %Change
Detached 610k 620k 1.6
Attached 375k 380k 1.3
Appt 305k 308k 1.0
2005
Mar05 Apr05 %Change
Detached 503k 518k 2.9
Attached 319k 325k 1.9
Appt 248k 254k 2.4
Hey now!hey now!every body put your hands UP in the air now.year over year over month over month over,Vancouver B.C.BPE
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Lager not Logger Says:
April 4th, 2008 at 7:37 pm
Here’s the forbes article on the worlds most expensive rents:
http://www.forbes.com/2008/02/.....state.html
To find these and other such markets, we used data from Mercer Human Resource Consulting, which based its numbers on 2007 data for rental properties in the Class-A market. Though it means different things in different places, a Class-A designation roughly equates to a unit in high-end, unfurnished building in a good part of town. The measures are taken at the median level, so as to exclude the ridiculous costs of premium apartments in neighborhoods like London’s Belgravia or on Central Park in New York.
So yes this is NOT an apples to big apples comparison.
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Krrish2 Says:
April 4th, 2008 at 8:11 pm
Yep did some one say we are still at rock bottom prices?
Yeah “we are still at rock bottom prices” check the
forbes link by Lager not Logger and grab some beers not bears.
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Strataman Says:
April 4th, 2008 at 8:13 pm
Check out Pauls numbers! It’s BEAR Country!
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Jadeeast Says:
April 4th, 2008 at 8:43 pm
Drachen
You’re right the stats will reflect the site and not the city.
It still gives me an idea as to how things compare as far as asking prices on the market go.
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cashisking Says:
April 4th, 2008 at 9:20 pm
Cost of capital …. 2.5mm$ houses cost about 15-18,000$ a month to carry … go to craigslist and put in 4,000$ in min. in the apt/house renting section … pretty obvious people are assuming anywhere from 5-8% capital appreciation (if they’re rational investors). I’m sure if you did the math on Manhattan or equiv. London areas rent would be v. close to the cost of capital.
Hey bulls … $2,500,000 compounded at 8% in 80.5 years your place will be worth a cool Billion$ (not kidding!). For you more rational types watch for housing prices to revert to trend.
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Anonymous Says:
April 4th, 2008 at 9:25 pm
Get with it Rob A. You can’t come on this blog and spout your opinion! Unless of course it supports a real estate crash and you have a graph that people can link to.
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freako Says:
April 4th, 2008 at 9:47 pm
Check out Pauls numbers! It’s BEAR Country!
Yep, slicing through the 13K’s like a hot knife through butter.
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sheeplessinvancouver Says:
April 4th, 2008 at 11:20 pm
Re “Housing Market to Sink After the Games”
From the headline, I thought this would be interesting, but it’s just sloppy journalism.
Most of the investors buying because of the Olympics think the prices will go up after the Olympics. They may be wrong, but they are not buying so they can get $25,000 in rent for a couple of weeks.
“Pomeroy said the Olympics will create 3,000 new housing units, which will flood the market.”
If he’s referring to the Athletes Village, he’s probably right, but there’s no direct mention of that in the article. We blew our one chance to have affordable market housing when the current City government changed the plan.
“He said the underlying conditions for a bubble-burst are arriving — income stagnation, rising interest rates and over-supply of units.”
Aren’t interest rates dropping? If they’re coming down, they’ll probably go up eventually, but does this guy have a crystal ball that is telling him that they will go up in 2011?
“I would say wait — buy in 2011,” he said.
If everyone follows this logic, they will wait and the prices will drop before the Olympics. But then they might go up in 2011 because of pent up demand.
“Sharon Chisholm, the association’s executive-director, said she worries mostly about the young college graduate, saddled with student loans and working in a low-paying job.”
The young college graduates where I work may have student loans, but they’re starting at $40,000 plus a year – not exactly what you make working at the 7/11. Most people don’t take out a mortgage just out of college and they don’t usually start out by buying a house.
“Those young people go into the rental market, she said, but even rental units are declining.”
Fewer units means a lower vacancy rate. Rents go up. I know, a few on this list would disagree arguing that rents depend on affordability. I guess they’ve never shared a one bedroom with a group of roommates. That’s how you work around the affordability problem.
“The latest figures show that it takes 79.2 per cent of the average Metro Vancouver income to buy a 1,500-square-foot house, an 18-year-high.”
“Metro Vancouver’s median income of $59,000 wouldn’t qualify for a mortgage on the average house, now $648,592.”
I’m not disputing the figures. People making the median or less don’t buy houses unless they have help with the down payment, win the lottery or whatever.
“Duncan Maclennan, professor of urban economics at the University of Ottawa, said people are investing in buy-to-let homes in Metro Vancouver, pushing prices up.”
True, but they’re mostly buying condos, not houses, unless they find a dump for a really good price and rent it out until the land increases in value (or the growop gets busted).
“You certainly also displace first-time buyers, because you have pushed up the price of housing,” said Maclennan.
True, but the market eventually corrects. The first-time buyers wait until the prices drop and they have a down payment.
There is plenty of analysis on the web about how prices drop in cities post-Olympics. Why is there no mention of these stats in this pitiful excuse for journalism?
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Krrish2 Says:
April 4th, 2008 at 11:36 pm
freako,
Here we got paul’s number as following…..
Surprise for STRATAMAN and his friends mine too but out of b/b.
Okey wow just my sweet toe you don’t have to GO!there to check p’s number because that would be another jolt for our bears fellas no! not yet, are you sure? you did not get that up to here hoon? OKEY let me break that bearish dream today.
“Those are resale home NOT INVENTORY, resale home means those homes are under some one’s care -some body already taking care of them,Inventory is “something that is available in unused stock”
Another Punch “Ground for third last parking lot has been broken” at robson infront of library and two left over parking lots never know if some body want to sell them or keep’em.
Nothing to count in the begining of 2009 get some jugs now but sorry I my self do not drink.
CHEERS ALL THE BEARS UP-UP-AND UP
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sheeplessinvancouver Says:
April 4th, 2008 at 11:54 pm
Olympics and Housing Prices
I don’t think the Olympics will have a significant impact on housing prices. The headlines about the credit crunch may. People are starting to wonder if it could happen here. As a result, comsumer spending and home buying will likely start declining.
That’s not what keeps me awake at night. I’m watching for oil and commodities to reach bubble status. I don’t think we’ll see oil at $60 a barrel ever again, but it’s overpriced right now. And when it goes down, so does the economy in Western Canada.
I saw this first hand in the early 80s. I was living in that day’s equivalent to Fort McMurray. The National Energy Program was announced. The rigs packed up and moved out of town almost the next day. There was actually a line up of them on the highway heading for the US. Even those who didn’t work directly for the oil companies had their hours cut back or were laid off. Sixty-unit apartment buildings emptied of tenants.
This was the summer of ‘81. Back in Vancouver housing prices were at all time highs. Every day there was an article in the paper about how unaffordable housing had become. The latecomers to the frenzy were still scooping up houses expecting to make big profits.
The help wanted ads went on for pages and jobs were easy to come by. The economy was booming and only those of us who had seen what happened in the oil patch knew it was an illusion.
It took about six months and then poof went the economy in Vancouver. It didn’t recover until the late ’80s. Those of you around then will probably remember the lineups for jobs at Expo 86.
Which brings us back to the Olympics. I know a lot of people who came to Vancouver for Expo 86, liked what they saw and moved here. There is now an expectation that the same thing will happen with the Olympics. Only time will tell if they are right.
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patriotz Says:
April 5th, 2008 at 12:13 am
We blew our one chance to have affordable market housing when the current City government changed the plan.
The city cannot create “affordable market housing”. The market decides for itself what is affordable. If prices are high enough that supply outruns demand, prices will have to come down.
Nobody has any right to own RE. If people decide to pay ridiculous prices to buy RE, that’s their choice and they will have to face the consequences.
That said, there are a lot of things the government can and should do to discourage RE speculation. But it’s a lot easier to drum up a fake bubble economy than one based on sustainable production. Well look at the outcome of that south of the border.
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Drachen Says:
April 5th, 2008 at 7:29 am
I hear the City NDP wants to pop the bubble. Problem is their plan seems a bit backwards to me, see if this makes sense to anyone out there.
Their plan is to legalize all secondary suites on the premise that with the extra housing available people will rent some guy’s basement rather than buying.
First off, it’s not like anyone in this city is shy about having an illegal suite. Secondly it will probably have a negative impact because more people will rationalize that they can squeeze a half dozen students into their basements to help with the mortgage and people who are interested in buying aren’t going to settle for a crappy basement suite with an unprofessional landlord.
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Burden of Proof Says:
April 5th, 2008 at 8:31 am
Drachen,
I agree with you, its a dumb idea. Dramatic increases in property taxes for non resident buyers and for unoccupied residences would be a good move, in my view. It may limit some real demand and also limit the perceived demand that contributes to speculation.
I believe that many other jurisdictions have taken this measure.
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Re-diculous Says:
April 5th, 2008 at 8:54 am
SleeplessinVancouver
Interesting analysis of the “Housing to sink after games” article of yesterday. Perhaps the arguements of these so called “RE experts” are very weak and misleading irrespective of whether they are presenting a bull or bear case.
I believe, that far more significant than the content, is the fact that the Province posted an article with this title at all.
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-A- Says:
April 5th, 2008 at 9:13 am
So little RE left, so many buyers.
I would, beg, borrow and, steal to get in the market, before I am forever priced out, but there is just so little supply to choose from, but seriously:
Do the MLS listings include listings that are exclusive to a specific realtor? If so, it means there are probably thousands more listings than what MLS shows.
Does anybody have any stats?
Is there a greater landslide on the way?
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Rob A. Says:
April 5th, 2008 at 9:59 am
I was having cocktails at Opus Bar and I told my friends about this blog. We all had a good laugh
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jadeeast Says:
April 5th, 2008 at 10:19 am
Is Rob A a recent imagrant from “Trollistan” or a serious person?
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jadeeast Says:
April 5th, 2008 at 10:21 am
^not spell good now me^
“immigrant”
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Anonymous Says:
April 5th, 2008 at 10:34 am
Rob A
you’re a goof and your smug RE-hyped attitude will will soon be gone. Stay tuned and you might learn something about economics and realestate cycles.
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/dev/null Says:
April 5th, 2008 at 10:38 am
Trollistanian by heritage but not new. Name’s different but same old noise. Another one for my killfile.
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blueskies Says:
April 5th, 2008 at 10:40 am
We all had a good laugh
who were you laughing at?
greater fools like yourself?
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-A- Says:
April 5th, 2008 at 10:41 am
“Comment by Rob A.
2008-04-05 09:59:29
I was having cocktails at Opus Bar and I told my friends about this blog. We all had a good laugh”
Rob, I guess what’s funny, or sad is a subjective thing.
I think your blog is both funny and sad.
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vanguy Says:
April 5th, 2008 at 12:59 pm
a little off topic, but…
what are all the renters who’ve accumulated savings doing with those savings? As the central bank cuts overnight rates, my citizens acct is now only paying 3.5% which after taxes, and inflation really means it’s paying 0%.
Some people I’m sure have 6 figure savings accounts, and are wondering what do with it. Commodities (risky), foreign currencies (really risky), real estate (hmm hmm), stocks (my choice)…
It’s open Friday so I’d thought I’d put this out there…
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macchiato Says:
April 5th, 2008 at 1:30 pm
“I was having cocktails at Opus Bar”
hahahaha! … dude, if you’re trolling, this is hilarious that you would think people would actually give a shit about ‘cocktails at opus bar’.
If you aren’t trolling, then I feel sorry for you, i guess the jedi mind tricks in the Concord Pacific presentation centre videos really got to you.
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macchiato Says:
April 5th, 2008 at 1:36 pm
“Some people I’m sure have 6 figure savings accounts, and are wondering what do with it. ”
I bought 1 and 2 year GICs just before the rate rut, since it was advertised pretty well.
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Vansanity Says:
April 5th, 2008 at 2:07 pm
vanguy – Last stock market correction created a good buying time, I made some good gains over the last bit. There are some bargains still out there. With a recession in effect, you’ve obviously got to be pretty careful. It’s all about due dilligence. Some say you’re best served to put your money in something safe and wait for another big correction, then buy. Watch for bonds over the next while, try to buy before the next rate cut.
I know this is weird, we’re talking about investments that you don’t need to borrow the money to buy.
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blueskies Says:
April 5th, 2008 at 3:25 pm
I know this is weird, we’re talking about investments that you don’t need to borrow the money to buy.
and you never have to face a margin call!
one realtor i met said his clients were mortgaging to 90% of stated value (existing home)and investing the funds in the stock market and buying 2 bd/2ba to flip….
i know i couldn’t sleep well under that scenario
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Jeff Says:
April 5th, 2008 at 4:12 pm
My friends and I laugh too… we’re all renters
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patriotz Says:
April 5th, 2008 at 4:42 pm
I hear the City NDP wants to pop the bubble. Problem is their plan seems a bit backwards to me, see if this makes sense to anyone out there.
Their plan is to legalize all secondary suites
One, there is no “City NDP”. Two, secondary suites were effectively legalized citywide over a decade ago. Three, the housing market is regional.
And last but not least, an asset bubble means that the price of an asset is out of line with its yield. Prices are way, way, out of whack with rents. Asset bubbles don’t pop due to increase in rental supply, but rather due to the exhaustion of greater fools in the purchase market. The GF’s had the option of renting at a much lower price all along.
Got a link to this supposed propopsal?
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blueskies Says:
April 5th, 2008 at 4:50 pm
for a good laugh!
http://tinyurl.com/2q4bu6
roll down to 3-28….. your quintessential vancouver bear
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Strataman Says:
April 5th, 2008 at 5:24 pm
RobA “I was having cocktails at Opus Bar”I always wondered about that; would often see the kitchen staff in the alley after closing behind the Opus.The manager told me they give all the kitchen staff a bar shot on the house after closing.I look down on that area out of one of the windows of my very cheap Yaletown rental on the 32nd floor!
Was good of you as the doorman to get your wife a job in the kitchen to help with your mortgage after your regular jobs are over. Ease off the poor guy fellow bears! Having a cocktail is something pretty big in his eyes. 
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cashisking Says:
April 5th, 2008 at 5:40 pm
“renters who’ve accumulated savings”
If you decide on equities I would consider a healthy dose of U.S. stocks as I believe that U.S. rates (S term) cannot go any lower. Stay in defensive names (eg J&J) beware the financials – a few of the Horsemen haven’t shown up yet.
Personaly I would still keep a lot of money in cash (or equiv.) but be careful how you do this. Brokers fees and fund fees (MER’s) can kill real rates of return in such a high inflation rate environment.
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Vansanity Says:
April 5th, 2008 at 5:50 pm
Hopefully most who invested in RE are out or getting out ASAP and have some handsome profits for their risk.
Trends show we’re at a peak; those who don’t believe that are patting themselves on the back right now, but remember: “Pride goes before the fall”. So, be proud of your current property holdings, enjoy it.
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Dosh Says:
April 5th, 2008 at 6:40 pm
Why don’t you stop telling people what to do with their money? you so sure that the market is going to crash but how many experts have you heard say that? One guy from Ottawa? What about people that are local and know the market like Ozzy and other experts that have made real money in the game? I don’t hear them telling people to sell and they know whats up.
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Carioca Canuck Says:
April 5th, 2008 at 6:46 pm
Vanguy……
Wifey and I are sitting with $250K in the bank here in Calgary. Getting 3.55%……it pays 2/3 of our rent.
Worldwide…….equities are overvalued…..commodities are overvalued…..RE is overvalued……collector cars/baseball cards are overvalued, etc…..everything for sale is overvalued.
It’s a stalemate….I will wait while the world around me slowly crumbles.
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blueskies Says:
April 5th, 2008 at 6:51 pm
..everything for sale is overvalued.
which is why i can see a deflationary period ahead of us…with the exception of energy and food and possibly health care
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tacoman Says:
April 5th, 2008 at 7:17 pm
Blueskies,
North Americans would eat to live, not otherwise. This, ironically, may result in less obesity, diabetes, and heart problems, which should help to keep the health care costs in check for some. Add to this the high cost of fuel; no more speeding that V6 to get to the gym on time. Walking to the mall and carrying grocery bags back home will efficiently replace it. We’ve got some interesting times ahead to witness.
Higher priced food is good
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Drachen Says:
April 5th, 2008 at 8:33 pm
Dosh
“how many experts have you heard say that?”
The same argument is put up for global warming, many “experts” are paid hefty sums to come up with convincing arguments for the oil and gas industries. Their voices drown out the few professionals who are working on a limited budget but have integrity and honesty on their side.
Aside from which, Schiller, (who is not from Ottawa by the way) is recognized as THE leading mind in market economics by the non-corporate professionals in the field was one of the first to say Vancouver is the WORST city in North America for bubble size.
And if you want “experts” there are actually a half dozen people here who qualify, which is a half dozen more than you’ll find on the bull side who aren’t having their pockets gilded in one way or another by their boosterism.
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Drachen Says:
April 5th, 2008 at 9:35 pm
I almost forgot in responding to Dosh.
If you need further proof that the end is nigh just look at the number of responses to this weeks FFFA 112 in 2 days! I think that’s a new record!
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Not Mathy Says:
April 5th, 2008 at 11:31 pm
Wow. lots of activity on this board, is the housing bubble becoming a bigger deal? Agree with drachen, looks like a market peaking.
And don’t forget the crazy number of new listings coming on so far this year – they’re being added at a faster rate than we’ve seen for a long time and the buyers aren’t showing up like they have in the past. Inventory has to build quite a bit before the market turns and thats what it doing now.
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Not Mathy Says:
April 5th, 2008 at 11:34 pm
nice comic blueskies
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moz Says:
April 5th, 2008 at 11:45 pm
I’m suprised to see so much negativity about real estate here. I’ve considered selling my condo, but you have to live somewhere right? If I sell and miss out on more gains I’ll be kicking myself, but it would also suck to lose some of the money that I’ve made in the last few years. I admit I got lucky with the market going up don’t mean to be overly greedy:).
I do feel sorry for anybody entering the housing market today, it was tough when I bought 5 years ago but prices now are so much higher I don’t know how people even do it.
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macchiato Says:
April 5th, 2008 at 11:47 pm
Shiller .. “Vancouver is the WORST city in North America for bubble size.”
Not that I agree at all with Dosh, but to be be fair, I think Schiller later clarified his comment to mean that Vancouver is one of the “bubbliest”, ie) boom, bust nature. He was not specific.
I am not from the US, but I called BS on that market in 2004. It was just obvious for anyone that read a few sites and blogs.
Anyone can come to any blog on read this:
1) Vancouver: ~60K median household income
Economies slowing, some recessionary
2) Median benchmark house price is ~$675K
3) Net new migrants to Metro Van: ~33-35K (as per metro Van’s site, 2006 I believe, most recent numbers offered)
4) Current ‘under construction’ supply = 26K units, making a pretty good care for future oversupply
5) Record price highs in real terms (see sauder data)
6) Established societal belief and fact: RE in Van. is unaffordable
7) fixed rate mortgages not changing in a material way
9) A third of new jobs are in construction (virtual cycle, that will not continue indefinate )
10) Other world RE markets are melting down
What the hell difference does it make about whether someone is local or not, that’s grasping at straws. You are in a world where just a couple of years ago, the most powerful economists in the world told us their was no bubble in the US, just before the pop began.
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Krrish2 Says:
April 6th, 2008 at 7:39 am
“1) Vancouver: ~60K median household income”
Not enough to compete with market force but there are alternate people to grab 4-10 to replace 10 with with income challenges.
“3) Net new migrants to Metro Van: ~33-35K (as per metro Van’s site, 2006 I”
Drats!this is 2008,30 k people move to Vancouver and 60,000 to bc in 2007.
“4) Current ‘under construction’ supply = 26K units, making a pretty good care for future oversupply”
Where is it?when ever some project get launched there are presale buyers and there are requirements of sales to get financing from bank otherwise developers can’t proceed,in that case”most of projects are sold and some new one are over 80% sold”.
“You are in a world where just a couple of years ago, the most powerful economists in the world told us their was no bubble in the US, just before the pop began”.
Drats!that’s not Vancouver it’s depend on in what city do you live all different cities of the world got different future,weathers,problems,area,and floor area.
Have you ever heard that we are DIFFERENT here?
“6) Established societal belief and fact: RE in Van. is unaffordable”
Capitalism-Competition- keeps the market to it’s driving forces called “demand and supply”and the future is depend on land size not on INCOME so housing in Vancouver will never be affordable other than with high rates of pay and low-low interest rates.
even for social housing there will be stress from the same forces means people with low income will flood into social housing that will bring the cost to afford social housing UP.
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chip Says:
April 6th, 2008 at 8:11 am
Dosh says:
“The same argument is put up for global warming, many “experts” are paid hefty sums to come up with convincing arguments for the oil and gas industries. Their voices drown out the few professionals who are working on a limited budget but have integrity and honesty on their side.”
You’re kidding, right?
Only someone emerging from a 30-year coma would think there are a “few” climate scientists working on “limited” budgets. They’re drowning in cash.
There’s a speculative bubble in global warming science. Surface temperatures dropping since 1998, troposphere unchanged, oceans cooling — forget about that! — buy into the hysteria now before you get left behind!
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franko Says:
April 6th, 2008 at 8:25 am
.
.
Er…guys, let’s just buckle up and ride out the imminent crash. We can take care of global waming or freezing after we’ve loaded up on cheap RE.
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Drachen Says:
April 6th, 2008 at 8:38 am
So you’re debating global warming now Chip? Let me guess you’re also a Real Estate bull. Flat Earther? Believe in UFOs? How about the Moon Landing conspiracy? CIA blew up Tower #9?
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Drachen Says:
April 6th, 2008 at 8:42 am
Oh I forgot about my favourite conspiracy theory. Autism is caused by inoculation (you’d be on side with such intellectual giants as Jenny Mcarthy here).
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Anonymous Says:
April 6th, 2008 at 8:53 am
Off topic, but in view of the fact that Vancouver just had the coldest last week of March on record, the globe can’t warm up fast enough for me.
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blueskies Says:
April 6th, 2008 at 8:59 am
methinks chip has been through here before….
drive by trolling
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-A- Says:
April 6th, 2008 at 9:20 am
Krrish you too much smart guy, I thinks it’s smart idea to listen to you and go buy big Vancouver Special and and then become rich.
You very right, i do mathematical work on paper, if Vancouver (world class city to be) when it become big big big, like Mexico City then house cost price go up from 10 mutltiples of resident income to maybe
20,30,40 and then 50.
So now I think question for you…. should maybe buy mortgage company to finance mortgage who will get pay from everyone in family mortgage for 100, 200, 300 year mortgage.
Will condo leaky leak before paid off?
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krrish2 Says:
April 6th, 2008 at 10:11 am
A,
if the sfh cost 50k a homeless on the street can’t afford it anyway.
mortgage term is based on our need their is no lenght of time but it’s based on our ability to pay back- case other than that are not recognized so there is no need to make “stuff up” hammer of inflation drives people to locations and stages.
Leaky condo is cheap compare to human leaks the only thing you were unable to sort out is that you can not budget the water to deal with human’s leak.
You can still bet on condo because not all of them leak but few otherside human?anyway cost to manage leaky condo is less than what ‘miss universe pay for “always”till atleast 50 year’.
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Anonymous Says:
April 6th, 2008 at 10:32 am
-A-, why do you troll for responses from the troll? You know he’ll only post nonsense replies. I don’t care what side of the debate you’re on, I’d rather read comments that make sense, please stop baiting him.
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-A- Says:
April 6th, 2008 at 11:21 am
.
.
.
“-A-, why do you troll for responses from the troll? You know he’ll only post nonsense replies. I don’t care what side of the debate you’re on, I’d rather read comments that make sense, please stop baiting him.”
Anon: The troll above actually gives us an interesting perspective.
If you analyze what he says it’s basically not much different than what Pastrick, Muir, and Mortgage Pushers, disguised as impartial bank economists and realtor board paid shills claim.
He is smart, and delivers the message so to solicit a visceral response which is how real estate in Vancouver is sold.
Yes, he is a low life, but a smart one, who makes a lot of sense to the kool aid drunks!
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Booya Says:
April 6th, 2008 at 12:01 pm
“I’ve considered selling my condo, but you have to live somewhere right?”
Moz – owners say this all the time, or the nearly-equivalent “I could sell my house now that the market is peaking, but then I have to go buy another one at peak prices”. Think about it for more than 2 seconds… the market is peaking in terms of price/rent ratios. Right now the cost to rent an equivalent unit is 1/3 the cost to buy. The market WILL correct back to realistic ratios close to 1/1. It ALWAYS does. The smart thing to do is sell now, rent for 5-6 years while the market declines, and buy again at the bottom. The financial case for renting right now is overwhelming.
Despite what a lot of people say, RE cycles are surprisingly predictable. They last about 10-12 years peak-to-peak, which means 5-6 years from peak to valley. The last time RE peaked in Vancouver was 1995. If you bought then, you would have had to wait until 2003 just to break even. Just look at the charts.
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/dev/null Says:
April 6th, 2008 at 1:48 pm
Booya, good point. Someone (freako? mohican?) once pointed out that if you bought at the peak in 1981 you had to wait until 2006 (25 years!) to break even.
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Booya Says:
April 6th, 2008 at 2:29 pm
… and that doesn’t even include mortgage interest, maintenance, insurance, property taxes, realtor fees, etc. Not to mention the fact that most people fail to account for inflation when calculating their RE investment returns.
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macchiato Says:
April 6th, 2008 at 3:13 pm
Krrsh, your English is incoherent, I wish not to engage in a rebuttal since it is a waste of time, although find it interesting that you mention:
“Drats!this is 2008,30 k people move to Vancouver”
If you mean ‘net new migrants’, cool, that’s less than the 33K from 2006, that I mentioned, thanks for reinforcing my point. That means there is almost 1 new housing unit for every new person, even though the current person per household ratio in Metro Van is something like 2.5 people per unit according to BC stats.
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macchiato Says:
April 6th, 2008 at 3:20 pm
SHOCKING JOBS NUMBERS
My point earlier about the construction jobs was understated, as a bear, I was actually very, very surprised to read this this morning:
“Year-over-year, B.C. has created about 55,000 jobs. The province’s robust construction industry, which generated 28,000 jobs over this period, has been the main engine of that growth.”
This is a shocker, over half the new jobs in the last year in construction. The house of cards gets a few new floors added, maybe the penthouse. This is what Jock Finlayson has been talking about over the last several months.
reference, in the daily bird cage liner, the Province:
“Building drives jobs gain
But unemployment up as people flood labour market”
http://tinyurl.com/4p5j92
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macchiato Says:
April 6th, 2008 at 3:28 pm
/dev/null, totally true about 81 peaks, anyone can just go look at the Sauder data for prices in real terms for the benchmark they use, I think it’s 2 storey detached. VHB had also very nicely laid out all the peaks and troughs over the years.
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jayceee Says:
April 6th, 2008 at 4:02 pm
is there any way to get access to reading the VHB blog? i’d really love to be able to read the old posts.
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Noname Says:
April 6th, 2008 at 4:14 pm
Krrrsh, I said “your English is incoherent,” … I take that back, I was able to make out what you’re saying. But, I don’t see much value in what you are saying, the waste of time is that I would be talking to someone who thinks fundamentals like local income are not important, a ridiculous attempt at butchering RE economics. I guess you also work in the ‘new math’ where negative cashflow purchases somehow make sense.
Keep on buying, mate.
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The Van Man Says:
April 6th, 2008 at 4:30 pm
Moz,
When you bought your condo 5 years ago, did you put in a lot of downpayment into it? Is it a new building? Is this in a good neighborhood and that you really like the people there? Do you have a lot of equity in it and are you the king of the castle, that is there’s no little lady needing the final sale approval?
Selling the personal condo or house in this up market depends upon a couple of factors and I think one of the most important ones is whether you have a lot of equity sank into it. If you do, you are more likely cashflow positive. You are right. You need a place to live in only if you are cashflow positive.
I don’t know if selling your place, then renting and then waiting a good time to jump in again would be feasible either. In the meantime, you might be tempted to invest your cashed out equity from the sale of your home and invest it into something. And that something is a big mystery. And do you see what happened to retail investors with Cannaccord’s ABCP trouble and that, they were led to believe they were investing in triple AAA securities which turned out to not be? Who would know? How would you know that? And how could you be assured that there won’t be a future financial SCAM that just, and just one day erode or destroy what equity you had cashed out earlier.
I know people that did that and failed miserably in the late 1990s with Nortel and JDS Uniphase. They thought by cashing out of the early 90’s bubble and then putting the bulk of the money into Nortel. And guess who advised them to?!? Mr. Garth Turner, when he was a paid spokesperson for Dynamic Mutual Funds. Yes, the same Garth Turner that’s selling his new book about the “Greater Fool”. I can assure you that he’s no fool.
We are the fools and I saw posts here championing his cause!
The bottom line is this, sell your condo only if you don’t like living in the neighborhood any longer, have very little equity in it and don’t mind renting for awhile.
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Anonymous Says:
April 6th, 2008 at 4:31 pm
/dev/null,
Very true. But this time, people who recently bought may NEVER recover. NEVER!!!!!! That is pretty scary. Think about that, NEVER!
The madness in the current situation may never again return. Even if it did, it may not be in our lifetime. Almost 70% of the average income goes to mortgage.
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Anonymous Says:
April 6th, 2008 at 4:41 pm
Buyers,
I have no clue why anyone will buy right now. The downside to buying R/E is far greater than the upside.
At best, the market will go up 15% over the next 5 years. Which means it will not even beat inflation. Actual gain or real gain, ZERO! However, it is very possible to have at 40-50% or even 60% drop in market value over the next 5 years.
It is currently evident that priced out forever is NOT possible as the price increase flatten.
If you buy now, you could be tied down forever!!!! Now this is possible.
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jayceee Says:
April 6th, 2008 at 4:48 pm
wow.
my friend and i went to check out some open houses today. i’m officially amazed at the stupidity that’s currently running rampant in this city.
800 sq.ft. unit in a building dt for $650,000.
crappy house on the east side (near main st.) for 1.2 million dollars. realtor tried to tell us that we could rent out the two suites downstairs for $900 each a month. yeah, anyone who buys a home for 1.2 million dollars to live in its upstairs portion is crazy.
wow.
i’m seriously amazed.
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The Van Man Says:
April 6th, 2008 at 5:06 pm
Most Canadians have a lot of their equity (savings) tied up in real estate. They have very little in terms of savings outside of this, so they really depend on the appreciation aspect of the RE to fund their retirement lifestyles. There are a lot of people who do tap the equity out of their homes. There was a whole slew of stuff like this being sold in the late 1990s by a lot of people. Gordon Pape and Garth Turner are the two that came to my mind. You rarely see them do that these days. Mr. Turner even, at one point in time, had a TV show of his own called the Millenium TV and his forum website, not to be confused with another TV Sci-Fi show of the same name.
When I was blogging on his site and that, I was championing people buying RE and not Nortel (when it was on free fall after the last dead cat bounce), he conveniently cut me off or err banned me. Guess what happened now?!?
Having said that, there is no value in our RE — it’s overvalued. At least this time, Mr. Turner is in agreement with me, or at least re-branded one of his older books perhaps, made a few statistical changes and re-launched it as “The Greater Fool”.
When people bought home in the early 80s, I am sure some of them bought them out of necessity. Raising a family in a small rental apartment just isn’t ideal. You need a yard, and a this and a that. When you need a 2008 iPod Touch, you may well just have to “overpay” a bit.
Sure, waiting a couple years later, the Touch would be worth less with scratches and smudges but you wouldn’t enjoy the same privileges of owing it when it was new. The wow factor is gone.
Much the same with RE. It’s hot now. Some of us buy them out of necessity. A lot of us talk about it. We were just at Costco a couple of days ago and we couldn’t stop hearing people talking about condos, mortgages, houses and construction jobs just strolling down the aisle for groceries!!! The last time we went down the same aisle during the late 90s, it was Nortel, the dot.bomb and stuff.
Sure, our RE is due for a correction and when it does, WOULD YOU put yourself in a position to buy with all the bad news flying?!? How many of you actually put money back into technology stocks after the dot.com crash?
Very few. Apple and RIM did well afterwards. Did most of you jumped in and bought when Apple went down to $20? Did most of you jumped in and bought when Transcanada Pipeline was down to $9 or Yogen Fruz was down to $0.50 during the midst of the Eskimo Pie take over, rebranded to Coolbrands and went up to about $30 and then crashed.
I would wager to say that, it’s a simple no, because if some of you did, you could buy your own place today even with the inflated prices with cash, yes cash! Maybe, just maybe some of them did with money earned from these profitable sales? Have you guys thought about that?
Come the next RE crash, I would also wager to say that probably most of you won’t jump right in even if the buying opportunity reveals itself. Just with the internet crash, our Vancouver RE news will only get worse and worse and even worse before it gets better. And when it does, it will already be in the midst of the next bubble, probably and hopefully not longer than 10-12 years.
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bdk Says:
April 6th, 2008 at 6:02 pm
I was at the Opus lounge and I saw a bunch of valets having drinks and I bet one one of them was “Rob A”
I was going to sit this one out since there’s no point trying to tell a dumb shit like him anything but don’t worry he’ll remember what a goof he is when he grows up a bit and realizes he thought past performance indicated future return. There were idiot valets who bought tech stock right before it crashed too and they certainly aren’t laughing about it now.
He probably just got into the market and lives at Spectrum. It hasn’t occurred to him that if “everyone” wants to live downtown they could have bought in the last 120 years but since he was still in Abbotsford ,living with Mummy, he didn’t know the first thing about Vancouver.
In his mind the sun doesn’t rise until he wakes up and since he’d never been downtown before he thinks it’s imperative to own in order to live.
Another reason he thinks you have to own is because property managers tend to pick other applicants when the choice is:
1.some dumb shit with a $7/hr+tip valet job and no references.
2.Anyone else.
Laugh away Rob. A, you should go meet Krissh at the Cobalt hotel and see if you can convince some homeless wacko’s to buy real estate since no sane person with an IQ over 80 is buying right now.
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tacoman Says:
April 6th, 2008 at 6:41 pm
Hey -A-,
I see you’re doing not bad at all writing in Krrishes lingo. Mind if I ask you where you bought that English to Krrishean dictionary? It might sell for $$$ on eBay
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blueskies Says:
April 6th, 2008 at 6:54 pm
babelizer:
i took boilerplate from Bob Rennis site and ran it through babelizer:
Conduit Bob Rennie, specializes Rennie Marketingsysteme, to formulate the plans of risk management single and effective concerning Wohnkondominiummarketing. Narrowly working as “a representative of the promoters”, Rennie defines Marketingsysteme Kondominiumtoleranz, mark of the tendencies of consumer and offers solutions, to carry out market demands. Rennie Marketingsysteme has the admirable relations of Canada with respect to the larger promoters and most progressive and now forms the same relations in the United States.
needs another couple of go arounds….
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jayceee Says:
April 6th, 2008 at 7:04 pm
has anyone read this forbes article? very interesting.
http://blogs.forbes.com/digita.....y-two.html
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Drachen Says:
April 6th, 2008 at 7:31 pm
Here’s the breakdown on media reporting, comic style.
This Modern World
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vanguy Says:
April 7th, 2008 at 3:39 am
30 years at these prices? bite me…Lots of people are going to die off in the next few years, no matter what kind of medical advancements we have. Their properties will be inherited by scum younger people who by and large will want to liquidate. Boomers also have nothing saved here in the US, dont know about Canada. That;’s going to keep the implosion going for years. I dont think Van’s going to get past 2010 before the bust stinks..
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The Van Man Says:
April 7th, 2008 at 6:09 am
Here’s an interesting note..
I happened to be watching a show re-run of BNN with Patricia Levitt Reed interviewing a person from the real estate industry. He was talking about how different the Canadian market is compared to the US and that we won’t suffered a similar downturn like they do. Then Patricia asked him if we have subprime mortgages in Canada. He said no, but in Canada we got something similar like lender B and C. I’m not sure what he meant by that. Maybe someone here could elaborate? But what got me interested was when he brushed it off as being not a big deal. He said, it’s only 5% of the total mortgage and that, it’s really not as bad as the Americans with their subprime..
If Patricia and that gentleman would have done some due diligence with the Mortgage Bankers Association of the United States of America, they have information which would reveal that ONLY 8.64% of total mortgage is subprime. That’s 8.64%. So statistically, a difference of 3.64% makes US case more serious than Canada?
But if you factor in the total population of the US compared to Canada, our 5% is a much bigger deal than US’ 8.64%. And besides, you can’t walk away from a Canadian mortgage than you could with some American mortgages, which could compound the situation even worse.
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-A- Says:
April 7th, 2008 at 6:22 am
The Van Man:
“Patricia Lovett-Reid, senior vice president of TD Waterhouse Canada Inc., ”
Enough said.
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Dormammu Says:
April 7th, 2008 at 8:11 am
USA housing prices fell before sub prime mortgage problems surfaced. At best you can say that the sub prime crisis accelerated housing depreciation. So I would look at the comments they made with even more skepticism than even you suggest.
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Dormammu Says:
April 7th, 2008 at 8:17 am
I’d also like to know what this could mean:
“something similar like lender B and C. I’m not sure what he meant by that. Maybe someone here could elaborate?”
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Drachen Says:
April 7th, 2008 at 8:17 am
Van Man
They’re ALWAYS focusing on sub prime as the excuse. The fact is housing is collapsing in the states (and worldwide) because it peaked. It was way out of line with fundamentals in many places, now it’s returning. This business cycle has taken place thousands of times and the ending is always the same. Gambling against that is like gambling that the sun won’t come up tomorrow.
It is an event that has been recorded thousands of times.
The outcome is ALWAYS the same.
There is no evidence to support the notion that we are significantly different this time to alter the outcome.
One definition of insanity is, “Doing the same thing over and over and expecting a different outcome.”
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Dormammu Says:
April 7th, 2008 at 8:19 am
I found this from the American http://www.loanpage.com glossary:
“The term BC & D is a rating of the loan. Similar to Moody’s Rating scale for Bonds as AAA, AA, A, etc. Generally, loans termed as A paper are for borrorwers with very good credit. BC & D lenders specialty in BC & D loans. For the most part, on our web site, we refer to BC& D as “problem or troubled” credit rather than using these letters. ”
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Carioca Canuck Says:
April 7th, 2008 at 8:27 am
Yeah right….there’s no subprime in Canada. Pffffttttt…….
IIRC something like 50% of “ALL” the mortgages that were granted in CALGARY in 2007 were 30-40 year amortizations and CMHC insured…..which IMHO, and I have to call it for what it really is…..were “SUBPRIME”.
Givng too much money (a 100% increae in 24 months), to someone with little or no vested interest (0-5-10% etc down), on weak terms (40 year ams) is suprime. Doesn’t matter how good or bad their credit is.
Vancouver has to be similar……..
An entire generation of 20-30 year olds is going to get slauighteredn their newly bought $400K shoebox condos are worth 20-20-40% less then their mortgages…….
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The Pope Says:
April 7th, 2008 at 8:45 am
There’s a simple solution to the whole debate over whether or not there’s a ’subprime’ issue here. All we have to do is refer to buyers taking 40 year mortgages with less than 20% down as ‘prime’ or even better ‘uber-prime’ and then we have no sub-prime problem here!
Doubleplusgood!
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Anonymous Says:
April 7th, 2008 at 8:58 am
No matter what they call it, I bet that mortgage applications and fraud gets a bit more attention once the market starts falling, just like it is in the states.
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jesse Says:
April 7th, 2008 at 10:02 am
“our 5% is a much bigger deal than US’ 8.64%. And besides, you can’t walk away from a Canadian mortgage than you could with some American mortgages, which could compound the situation even worse.”
There are arguments for Canada’s situation being better AND worse than the US. IMO “subprime” is merely a symptom and we will see plenty of “prime” issues as well. The subprime stuff was just the first in line to hit the fan. Canada has subprime and lots more prime. There will be fallout but it may not be as explosive as the US.
It’s silly to think that CMHC MI is going to save the market. MI is merely a stop against outright default but BANKS LOSE MONEY WHEN THEY INVOKE CMHC POLICIES. I love the logic:
1) CMHC underwrites loans
2) Therefore I can issue loans to anyone without any risk
Wrong. Banks need to make money on loans. CMHC may prevent them from writing off billions but I would be surprised if, when under pressure to shore up balance sheets, they keep lending to those they are certain will default. Also I have said before that getting money out of an insurer is often more difficult than it looks, especially if there is any inkling of fraud. The CMHC executives need to show self-sufficiency and this is not done by making good on all claims.
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Drachen Says:
April 7th, 2008 at 12:15 pm
Jesse
I disagree with point # 2
The CMHC has acted very poorly up until now, they likely will never prove any wrongdoing on the side of the banks in cases of mortgage fraud so they’ll get the money. Banks are large institutions with ways of twisting arms that your average home owner with an insurance claim cannot match, the CMHC will be prompt in their repayments. Your first few years of paying off a 40 year mortgage is almost all interest, which is money that goes straight to the bank, so if the average person with a high risk loan pays only one year the bank has still made money on the deal, even if it’s not quite as much money as they’d like.
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jesse Says:
April 7th, 2008 at 1:12 pm
“Banks are large institutions with ways of twisting arms that your average home owner “
Having worked at a large company I can say that individual claims are rarely pooled. Each loan is different and there will always be enough exceptional cases to warrant more than just filling a checkbox on a computer screen. My point is that, if CMHC wants to, they can nickel and dime each payout and delay payment in the process, the sole purpose being to shore up their balance sheet.
“if the average person with a high risk loan pays only one year the bank has still made money on the deal, even if it’s not quite as much money as they’d like.”
This is true however the foreclosure process is not free. It costs many thousands of dollars, likely pretty close to and likely more than the spread that the bank gets on this loan for a 5 year term. Remember the bank does not pocket the full interest rate but the spread compared to an MBS or whatever other vehicle they are using for financing. To compensate for higher expected foreclosures the bank’s spread will increase, even with CMHC insurance. It is a vicious circle if MBSs require higher rates too.
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Drachen Says:
April 7th, 2008 at 3:16 pm
“if CMHC wants to, they can nickel and dime each payout and delay payment in the process”
I don’t think you understand the political relationship banks have in high places. If that were to happen (not likely) the banks would lean on the government and the government would lean on the CMHC to loosen the purse strings.
I think your idealism is great but it’s just unrealistic, the CMHC has shown ever intent to help the banks out of the housing jam while screwing over common folk, why would they change?
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jesse Says:
April 7th, 2008 at 3:58 pm
“I think your idealism is great but it’s just unrealistic, the CMHC has shown ever intent to help the banks out of the housing jam while screwing over common folk, why would they change?”
I agree it’s within the government’s mandate to tell CMHC how to spend money. I personally think what will happen is the crap will hit the fan and CMHC’s first reaction will be to sieze payments wherever possible to preserve their balance sheet — they are viewed as successful in their owners’ eyes if they don’t cost anything. The banks will fight tooth and nail, pull strings in the government and eventually CMHC could start flood the lenders with government money. But this will not happen overnight and could take many months before anything happens. The fear is, by the time lenders realise CMHC is relaxing its payments, lenders will have already clammed up.
Maybe we’re both cynical for different reasons. My view is CMHC is a business. My cynisism rises from the idea that the government’s bailout will be a window-dress at best, not actually spending much money in the process. I use the example of the recent US bailout package that few could actually access as what could happen in Canada.
I still think it’s silly to think lenders will continue to lend to those who are at a high risk of foreclosure in the face of falling prices unless CMHC also covers their foreclosure and administrative costs too.
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sheeplessinvancouver Says:
April 7th, 2008 at 8:54 pm
I don’t have the link, but if you go to the CMHC site and download the free publication Canadian Housing Observer 2007 there is an explanation of how sub prime and near prime mortgages work in Canada.
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Anonymous Says:
April 8th, 2008 at 4:04 pm
This Rob A. guy must be joking with us. It has to be sarcasim …. people aren’t that dumb to post:
“I was having cocktails at Opus Bar and I told my friends about this blog. We all had a good laugh”
Please leave me with a little more hope in the human race …..
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chunker Says:
April 8th, 2008 at 4:24 pm
Instead of arguing with guys like Rob A and Krrish we should really be encouraging them to buy up as much RE as they can. It truly is to our advantage to encourage these people to continue to inflate the balloon. The higher it rises the harder it will fall – we will benefit from a steeper correction.
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bdk Says:
April 8th, 2008 at 5:23 pm
This applies to this thread much more (pasted from Odlum Browns market report):
When a particular asset class delivers outstand-
ing returns over an extended period, investors
become convinced that there are solid funda-
mental reasons for the trend. Theories are
developed to justify participation and disregard
valuation considerations. In the early ’70s, the
“Nifty Fifty” stocks like Polaroid and Xerox were
going to make money forever. At the beginning
of the decade, the Internet was going to render
traditional industries irrelevant. Today, growth
in China and India is expected to translate into
a permanent shortage of commodities.
Remember when people said tech stock could never lose money because the internet was never going away?
Also
During the technology mania, valuation consider-
ations were dismissed due to fear of missing out
and underperforming “hot” investment man-
agers committed to the new era